TaxTMI 
TaxTMI 
2018 (4) TMI 106
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.... Lakhs stands imposed on Shri Harsh Sachdeva & Shri NItin Sachdeva, both Director of appellants company namely M/S TEFPL. Further penalty of Rs. 5 Lakhs stands imposed on Shri Surinder Khanna, Proprietor of one M/S BES Traders, Agra. 2. After hearing both the sides duly presented by Shri A. K. Prasad and Sri Anil Sisodia, Advocate for appellants & Shri Rajeev Ranjan, Joint Commissioner for Reveneu, we find that M/S TEFPL as also M/S RCI are manufacturers of PU, PVC & TPR Soles for Footwear products. Both the Units are located in Agra and registered -with the Central Excise Department and were clearing their final product on payment of duty. Shri Harsh Sachdeva as also Shri NItin Sachdeva are Director of appellants company namely M/S TEFPL & Parners in M/S RCI, Shri Surinder Khanna is Proprietor of one M/S BES Traders, Agra, dealing in the Soles, including Soles of the present two manufacturer appellant. 3. The Officers of DGCEI, New Delhi searched the factory premises of M/S TEFPL & RCI on 26/10/2013 and conducted various checks and verifications. Their records were also scrutinized. However, the Officers did not find any discrepancy, either in their stocks of the raw-materials o....
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....d on various dates. Similarly, statements of Sanjeev Kakkar, Cashier of sales depot of the manufacturer as also of Shri Mohan Tiwari, Accountant of M/S Rubber Complex India were recorded. The said statements would be adverted to by us during the course of our discussions. 7. Based upon the above, Revenue entertained a view that the manufacturing units engaged in the manufacture of Footwear Soles were clearing their final product in a clandestine manner. As such based upon the print out obtained from the Pen Drives, proceedings were initiated against both the manufacturing units by way of issuance of Show Cause Notice dated 23/02/2015 raising demands against them as also proposing imposition of penalties. It is also seen that another Show Cause Notice dated 22/04/2014 was issued proposing confiscation of the seized goods from the trading premises. Both the Show Cause Notices were adjudicated by the Commissioner by a common order, which is impugned before us, vide which he confirmed the demands along with confirmation of interest, imposed penalties and confiscated goods, as detailed in the preceding paragraphs. The said order of the Commissioner is impugned before us. 8. The Id. Ad....
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....rliest available opportunity, on 13.8.2014 and hence cannot be relied upon. G. The defects in compliance with the provisions of section 36B cannot be cured or rectified through any corroborative oral statements. H. The case of the department is also that M/s.BES Traders were a dummy unit of appellants NO. 1 and 2 and, therefore, the pen drives seized from their premises related to unaccounted clearances of the appellants, In this context it is submitted that during the adjudicating proceedings itself, the proprietor of BES Traders, Shri Surinder Khanna, had filed 2 affidavits about his status and had also supplied all documents including his IT returns, VAT returns and balance sheet, etc. to establish his independent character. Though Shri Harsh Sachdeva had, right at the initial stage of investigations, informed the department that BES Traders was an independent entity whose proprietor was Shri Surinder Khanna, but neither was this aspect investigated by the department nor was any statement recorded of Shri Khanna. This was more important since the pen drives on the basis of which the whole demand has been raised, was found in these premises. I. In this background, if ....
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.... seizure of unaccounted goods during the course of transportation. viii) The transporters/drives of vehicles should have been identified who would have transported the non-duty paid goods. There is no such evidence. L. Statement dated 10.12.2013 of Shri Harch Sachdeva is contrary to the records submitted by Shri Surinder Khanna, the proprietor of BES Traders. In case of conflict, documents will prevail over statements. M. Apportionment of duty demand between appellant No. I(TFEPL) AND Appellant No.2(RCI) done by the department in the ratio of 3:1 is erroneous. Since the print outs obtained from the pen drive are quite detailed it would have been possible for the department to ascertain whether the sales related to PUC soles, TPR soles or PVC soles. This was important since the value of soles are significantly different, with PU soles being the costliest. Since both the appellants had two machines each for manufacturing PU soles the duty demand in respect of PU soles should have been apportioned in the ratio l : 1. As regards TPR/PVC soles, the appellant NO. I had 20 machines to 5machines of appellants No.2. Hence, of at all, ratio should have been taken as 4:1 in respect of t....
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..... 10. Shri Rajeev Ranjan, Id. AR appearing for the Revenue reiterated the reasoning adopted by Commissioner for arriving at a finding against the appellants. It was contended that the Revenue's case is based upon the pen drive recovered from the premises of M/s.BES Traders, Agra. The adjudicating authority has given a detailed finding that BES Traders is actually not the proprietory concern of Shri Surinder Khanna and is being controlled and managed by Shri Nitin Sachdeva, son of Shri Harsh Sachdeva. The Id. AR draws our attention to the evidences on record, as discussed by the adjudicating authority, to show that Shri Surinder Khanna was never seen at the premises of BES Traders and it was only Shri Nitin Sachdeva who was always found to be present in the said premises. He has also countered the Advocate's contention that Shri Surinder Khanna has placed on record an affidavit along with documentary evidences to show that the he was the proprietor of the said BES Traders by reiterating the findings of the adjudicating authority that such maintenance of records by M/s.BES Traders, in his own name was a camouflage inasmuch as nobody discloses his financial dealings wit....
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....independent proprietory unit of Shri Surinder Khanna, the appellants have strongly contested the said finding of the adjudicating authority. 12. The findings of the adjudicating authority that the said M/s.BES Traders is not proprietory unit of Shri Surinder Khanna and is being controlled by Shri Nitin Sachdeva is based upon statement of Shri Harch Sachdeva recorded on 26.10.2013, wherein he deposed that the day to day business activities of M/s.BES Traders is being looked after by him and his son. He also referred to the fact that none of the employees of Ws.BES Traders has ever seen Shri Surinder Khanna and it was only Shri Nitin Sachdeva, who was supervising the said premises. As against the above findings of the adjudicating authority we note that Shri Surinder Khanna, during the course of adjudication, filed an affidavit to the effect that he was the sole proprietor of M/s.BES Traders. He also enclosed copies of financial records of M/s.BES Traders i.e. ledger account of sale, VAT returns, Income Tax returns and balance sheets etc. The adjudicating authority has not considered the said documentary evidences so produced by observing that in similar trade or business, no ....
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....S Traders. If the frequent presence of a particular person at a particular premises establishes his ownership of firm operating from the said premises, we are afraid that many people would be able to claim their ownership of the firms by frequently visiting the premises of that particular firm or unit. The adjudicating authority has not given any reasons to disprove the documentary evidences produced by Shri Surinder Khanna. It has also been contended before us that M/s.BES is not only doing the trading of the two manufacturers but also trades in the goods of other manufacturers. As such we arrive at a finding that Ws.BES Traders is an independent trading unit. 13. Having held so, we proceed to decide the evidentiary value of the pen drives recovered from the premises of an independent trader vis-a-vis the two manufacturing units. Admittedly the factories of TFEPL and RCI were also visited by the central excise officers on the same very day and searches were conducted. No discrepancy either in the stock of the raw material/inputs/packing goods or in the final product was detected by the visiting officers. It is also seen that no incriminating documents, which stand relied upon in....
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....e. We note that Section 36B(ii) lays down the condition for accepting a statement contained in a document produced by a computer subject to the condition that such print out was produced from a computer which was regularly to store or process the information for the purposes of any activities regularly carried out over that period by the person having lawful control over the use of the computer; during the said period there was regularly supplied to the computer in the ordinary course of the said activities, information of the kind contained in the statement of or of the kind from which the information so contained is derived; throughout of the material part of the said periodl, the computer was operating property; the information contained in the statement reproduced or is derived from information supplied to the computer in the ordinary course of the said activities. The said condition read with the subsequent clauses of the subsection require the Revenue to satisfy the facts that the print outs taken from the pen drives were being fed by a person linked with the appellant, in the ordinary course of their business. The Tribunal in the case of Ambica Organics vs. CCE&C, Surat-l -2....
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....ts are struck down by the higher courts thus leaving no evidence with the Revenue to prove the allegations. Reliance by the Revenue on the various statements of either directors which in any case stand retracted or the other statements of the conoticees etc. cannot be appreciated inasmuch as it is a well settled case that the allegations of clandestine removal cannot be made solely on the basis of the statements and require further corroboration by independent tangible and positive evidences. Said decision of the Tribunal stand upheld by the Hon 'ble Gujarat High Court, when the appeal filed by Revenue was rejected, reported as 2009 (234) ELT 242 (Guj.). 16. Apart from the fact that the Revenue has failed to establish the allegation of clandestine removal, we also note that the appellant have produced on record the Chartered Accountant certificate submitting that the production capacity of both the factories was incapable of producing such huge quantum of excisable goods as alleged by the Revenue. Further, as already observed, no excisable goods were found in the factory of both the manufacturing units at the time of visit of the Officers, either in the shape of raw mat....